On June 8, 2011 Governor Snyder signed Public Act 54 of 2011, which amends the Public Employment Relations Act (“PERA”) in four key ways.
First, it provides that upon expiration of a collective bargaining agreement (“CBA”), public employers shall pay wages not greater than the rate effective on the date of expiration, until a successor agreement is reached. Second, it provides that upon expiration of a CBA, any increase in the premiums or illustrated rate for insurance benefits shall be borne by the employee, until a successor agreement is reached. Third, it prohibits wage and benefit increases from becoming effective retroactive to the date of expiration of the prior CBA, by either an agreement of the parties or an award of an arbitrator. Fourth, it prevents the parties from agreeing to extend or honor the expired CBA during negotiations for a successor agreement.
More specifically, the amendment prevents an employee from receiving a step increase if his anniversary date occurs in between contracts, even if doing so could otherwise be deemed a past practice of the parties. Any step increase would not be effective until a new agreement is reached. Additionally, it requires the employees to bear the cost of any increase in benefit premiums or illustrative rates, on a straight dollar calculation. This requirement only applies to the increases based on category of coverage and does not apply to increases that result from changes in marital or dependant status. The amendment also authorizes the public employer to make the necessary payroll deductions to pay for the increased costs. Finally, PA 54 was given immediate effect upon signing by the Governor. Therefore, if a CBA was expired on June 8, 2011, the pay and benefit costs of the employer are frozen as of that date.
PA 54 represents a significant change to the landscape of public sector collective bargaining in Michiganby shifting the costs associated with expired CBAs to union members. It is also only one of many recent legislative changes affecting public sector bargaining rights.
For more information on how PA 54 and other legislative changes affect your collective bargaining relationship, please contact Fraser Trebilcock attorney Matthew A. Carmona at 313-965-9023 or firstname.lastname@example.org.